New met coke price cuts take effect in China

• Tags cut by RMB 50-55/t ($7-7.5/t)
  
  
• Prices may stabilise in near term
  
  

Mysteel Global: China's metallurgical coke market saw a price reduction of RMB 50-55/tonne (t) ($6.9-7.6/t) generally materialise across the country on 9 December, after leading steelmakers in North China's Hebei and East China's Shandong joined their peers' push for lower procurement prices, Mysteel Global learnt from market sources.

Following the adjustment, prevailing offers for wet-quenching quasi-first-grade met coke in North China's Shanxi decreased to RMB 1,480-1,580/t on Monday, and those for dry-quenching quasi-first-grade coke in East China's Shandong stood at RMB 1,880-1,950/t, exw basis with VAT included.

By the same day, China's national composite coke price under Mysteel's assessment stood at RMB 1,660.4/t, including 13% VAT, down by RMB 34.6/t d-o-d.

The downward pressure on coke prices was largely driven by the subdued downstream demand and poor profitability experienced by most domestic steelmakers. This prompted them to cut material costs in an effort to improve their financial standing, Mysteel Global noted.

Affected by the latest coke price cut, many port traders also pared offers for met coke cargoes to domestic users by RMB 50-55/t yesterday. At Rizhao and Qingdao ports in Shandong province, coke stocks totalled 1.14 million tonnes (mnt) as of Tuesday morning, down by 40,000 t w-o-w, Mysteel's tracking data show.

Nevertheless, some market participants predict that coke prices may begin to stabilise, with little possibility of deeper declines in the near term, as ferrous futures rallied across the board on 10 December, with coke futures leading the charge. This was mainly driven by the fresh pledge of top government officials at the political meeting the previous day to boost the country's economy.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.